– With the introduction of PS3280 PSAB has withdrawn existing Section PS3270, solid waste landfill closure and post-closure liability.

– Under PS3280, obligations for the closure and post closure care of solid waste landfill sites are recognized earlier than presently under PS3270, as the accounting treatment changes from incremental recognition of liability based on usage to recognition on acquisition, construction, development or normal use. This will result in an earlier increase in net debt. The recognized cost of assets would increase because asset retirement costs associated with tangible capital assets in productive use would be added to its carrying amount rather than expensed (as currently done under PS3270).

– While PS3280 includes in scope expected contamination related to a tangible capital asset controlled by the public sector entity, PS3260 contaminated sites addresses unexpected contamination related to the tangible capital asset.

– Some examples of asset retirement obligations which fall under scope of proposed PS3280 include:

– Under PS3280, an asset retirement obligation should be recognized when, as at the financial reporting date, ALL of the following criteria are met:

– Public sector entities will be required to capitalize asset retirement obligations associated with fully amortized tangible capital assets, except in the following instances:

– asset retirement obligations associated with unrecognized tangible capital assets should be expensed

– asset retirement obligations associated with tangible capital assets no longer in productive use should be expensed – The estimate of a liability should include costs directly

– The estimate of a liability should include costs directly attributable to asset retirement activities.

Getting a start on PS3280

– Public sector entities should start considering which asset retirement obligations may fall under scope of the proposed PS3280.

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